This excerpt taken from the TCM 20-F filed Jun 30, 2008.
B. Liquidity and Capital Resources
We finance our operations primarily through short-term and long-term borrowings and from the proceeds from our initial public offering. As of December 31, 2006 and 2007, we had RMB231.0 million and RMB797.8 million (US$109.4 million) in cash and cash equivalents, respectively, and RMB27.1 million and RMB89.1
million (US$12.2 million) in outstanding short-term borrowings, respectively. Our outstanding short-term borrowings consist primarily of short-term bank loans and, to a lesser degree, interest-free borrowings from the Guiyang municipal government. As of December 31, 2006 and 2007, we had RMB26.0 million and RMB88.0 million (US$12.1 million) in short-term bank loans and current position of long-term bank loans, respectively, and RMB1.1 million and RMB1.1 million (US$0.2 million) in borrowings from the municipal government, respectively. The increase in our outstanding short-term bank loans in 2007 resulted primarily from the increased current portion of our outstanding long-term loans and to a lesser degree, from our additional borrowings from various banks in China with a term of less than one year throughout the year. These borrowings do not contain specific renewal terms but we historically have negotiated renewal of these types of facilities shortly before the applicable maturity dates. The municipal government provides us with interest-free borrowings to promote local business and industry. Our interest-free loans were unsecured and repayable on demand. We also had RMB118.0 million and RMB74.0 million (US$10.1 million) in non-current portion of outstanding long-term bank loans as of December 31, 2006 and 2007, respectively. These outstanding long-term bank loans bore interest rates ranging from 6.03% to 8.42%, with terms of up to five years. As of December 31, 2006 and 2007, long-term bank loans of RMB10.0 million and RMB27.0 million (US$3.7 million) were both guaranteed by independent third parties. We paid fees of RMB200,000 and RMB0 (US$0) to one of these companies in 2006 and 2007, respectively, for the provision of such guarantees. The loans to which these guarantees relate were repaid in 2007 and therefore these guarantees are no longer effective. Our cash and cash equivalents consist of cash on hand and highly liquid short-term deposits that are unrestricted as to withdrawal or use, with original maturities of three months or less.
The following table sets forth a summary of our cash flows for the periods indicated: